Alvarez shocked the LaLiga giants during the 2026 FIFA World Cup as he openly stated his desire to move on with Barcelona the preferred destination for the Argentina international.
However, amid a furious war of words between the two Spanish clubs, Atletico confirmed their refusal to sell to Barca and Alvarez was unconvinced over a move back to the Premier League.
Arsenal's interest in the former Manchester City forward has not gone away and Mikel Arteta is still open to a move in the months ahead.
However, after Alvarez has been eased back into Diego Simeone's squad in recent weeks, that now looks to be impossible in the winter market.
As part of a wider drive to improve fan relations, Alvarez has issued an apology over his actions, which was accepted and praised by Simeone - meaning any possible exit will have to wait until the end of the 2026/27 campaign at least.